Ethics and values in advertising: two case studies.

Author: Krueger, David. Source: Business and Society Review no99 (1998) p. 53-65 ISSN: 0045-3609 Number: BBPI98063630 Copyright: The magazine publisher is the copyright holder of this article and it is reproduced with permission. Further reproduction of this article in violation of the copyright is prohibited.

 


This article explores the role of ethics in advertising, with a focus on the organizational cultures of advertising agencies as well as the professional and personal identities of the individuals who work within them. My descriptions, analyses, and conclusions are the result of in-depth interviews with approximately 35 professionals from two ad agencies located in a large American city.

I seek to uncover the role of ethics and values in these two agencies by (1) reporting the general purposes of the agencies as perceived and articulated by their members, (2) identifying the operative values that members perceive as shaping the cultures of their organizations, and (3) discussing ethical issues that members see pervading their work. As will become evident, members of both agencies think that ethical considerations can show their faces both in the "products" (the ads) they produce and in their business conduct, e.g., their relationships with clients and the internal functioning of their agencies. These two agencies also reveal significant debates that seem to be internal to the profession of advertising and to the cultures of ad agencies regarding the grounds of moral authority for the profession. These debates turn upon the question of whether and to what extent advertising professionals and agencies should make moral judgments about, or shape the moral intent of, the ads they produce, or whether they should leave these judgments to external sources of authority (e.g., clients, customers in the marketplace, or government or industry regulators). Significant debate also focuses on the meanings, roles, and applications of honesty and truth telling.

BRIEF PROFILES OF THE AGENCIESAgency A is a large regional office of a publicly held global ad agency with offices in dozens of countries. This regional office employs more than 200 professionals who work on several consecutive floors of a very large new upscale office building. The surroundings are sleek, stylish, and contemporary, with tasteful appointments and color combinations. Most professional staff have individual offices that ring the outer edge of each floor, with dramatic views of the city through windows that span most of the outer walls. People are clustered into functional groups (e.g., creative, media, account executives). Important vice presidents and directors have larger corner offices, with even more dramatic two-directional views. The inner areas of each floor comprise open areas for support staff, information technology, and research support services, as well as state-of-the-art conference rooms for client presentations and focus group discussions. Most of Agency A's clients are large, well-known consumer goods companies. Examples of current and past print ads are prominently displayed along the inner hallways throughout the agency, along with plaques and other mementos of award-winning ads. Members are typically young and friendly, greeting each other by first name. While the agency clearly has no dress code, most employees are dressed expensively and with stylish flair; it is not unusual, however, to see an occasional writer or artist dressed in blue jeans, t-shirt, and high-top athletic shoes. Business is going very well, and the place exudes confidence.

Agency B is a smaller privately held ad agency with a single office. This local agency employs approximately 35 people and takes up a large portion of a single floor of a mid-sized office building, away from the more "glitzy" part of town where other ad agencies tend to cluster. The surroundings, while stylish and contemporary, are more functional and modest in appointments and subdued in color and material. Most professional staff also have small individual offices along the outer edge of the agency, with views overlooking the city. The president occupies the only large corner office, which is stylish and well-appointed, but also clearly serves as a hub for agency activity. Its large bulletin board is covered with advertising, most of it work in progress and concepts and ideas to be developed. People are clustered into functional areas, with account executives inhabiting the outer offices on one side and creatives on another side. Administrative support staff and other support functions occupy the inner areas of the office in open, half-walled cubicles. Most of Agency B's clients are large and mid-sized local companies in a wide array of business sectors. While the agency displays some of its print ads in its lobby, they are not as numerous or prominent as those in Agency A. Members are young and friendly; clearly everyone knows everyone else in this agency. Attire is varied but tends to be more conservative. Business is not strong currently, and morale and confidence levels are not high.

AGENCY A: A LARGE, HIGH-PROFILE PUBLICLY OWNED FIRMBill Smith is a 69-year-old senior vice president of broadcast production, who has been with the agency for more than 30 years. He currently supervises 15 people who produce TV commercials for consumer goods clients. Bill has always wanted to be in the advertising industry and loves his work passionately, as evidenced by the fact that he has not yet retired in an industry known for its youth. He started as a copy writer and broke into TV advertising at its primitive beginnings, initially doing every aspect of TV ads single-handedly with no training. He came to Agency A as a creative director, and he has seen the agency grow dramatically and evolve through various changes in sometimes tumultuous and stormy leadership as well as a shift from private to public ownership. He sees a central part of his job as motivating his creative people to stay focused on core concepts and to foster a level of teamwork and mutual support that will create the best possible product for clients. Indeed, his goal is to produce advertising that will "put our clients where they never thought they would be and exceed their expectations." He pushes his colleagues and his clients to take risks and reach for breakthrough ads that are exceptional, rather than safe and bland. He also acknowledges a strong duty to manage his budgetary costs prudently, a demand that is more essential with public owners concerned with dividends and stock values. Bill is here because he loves his work and his craft, its energy and pace.

Melanie Summers is a senior vice president and group creative director in her mid-40s who has been with the agency for 10 years. She manages three creative directors and 13 creatives. Her clients include consumer product companies known to all. Her groups produce electronic and print ads that are industry award winners prominent on television and in magazines. She began in the industry as a copy writer and worked at other large ad agencies before coming to Agency A. A highly creative individual, she speaks eloquently about advertising's important contribution to American society and to the people who work in the industry: "We encourage creative expression and promote the value of the individual. This industry gives a chance for creative expression. Art's contribution to science is valued; function and aesthetics are linked together. Our craft forces me to use everything I am as a person, all my senses." She celebrates the "sense of discovery" that pervades the craft and the industry. Melanie appreciates and nurtures a strong sense of teamwork that pervades her own groups and the agency as a whole, with its capacity to generate collaboration rather than competition, as well as the execution of outstanding ideas. "This place operates purely." Married to another high-powered professional and with three small children. Melanie somehow seems to balance valiantly and efficiently the many competing demands placed upon her time. She acknowledges that she has become more paternalistic in her views about advertising since she has become a parent, feeling more strongly about the harmfulness of products such as tobacco.

Purpose of advertising: effective advertising that sells products. Members of Agency A articulate high levels of coherence and agreement about their agency's purpose and about their own professional roles in support of that purpose, which is to serve their clients by helping them sell their products. This purpose is illustrated by the following statements by agency members: "Our bottom line is to sell products." "We sell solutions for clients." "Our goal is to position products in the minds of consumers that have benefits that meet needs." This commitment to serve the client is embodied well in Bill Smith's aspiration to put their clients "where they never thought they'd be" and even by a production manager's claim that "we pull them clients out of the gutter with style.".

This basic purpose is perceived to impose an obligation on the advertising professionals to put the client's interests above their own self-interest or even in some cases the interests of the agency. For instance, tensions can exist between "creatives" (the writers and artists who create the original content and format of the ad), who sometimes want to create "great" ads that win awards and enhance personal portfolios, and account executives (who manage accounts and relate directly to clients), who wish to produce ads that satisfy the client and sell the product. This tension is generic within advertising agencies, and Agency A has resolved the tension in favor of the account executives. Indeed, they pride themselves on the number of industry "effectiveness" awards they win, as opposed to creativity awards. "Our ads are effective and creative, not outrageous." Strong service to the client can also conflict with agency interests, for instance the need to generate high profit levels for owners. Some think that revenue and profit demands sometimes compromise client interests, however, they suggest that this tension was less apparent earlier, when the agency was privately owned and had not yet become a publicly traded corporation.

Perspectives differ significantly as to whether the overarching commitment to sell a client's products permits any discriminating moral judgments about the moral nature or social value of the product itself. One member, for instance, stated that service to the client means that "we will take any product. Would we take Philip Morris? Of course. This is a business." The duty to serve the client would not allow much moral space for the agency to make critical judgments about the social value or harm of a product. However, individuals in the agency are permitted the freedom of conscience to decline work on an account if they have moral objections to the product or reservations about it. "We respect the desire of individuals who don't want to participate on certain products," Melanie Summers asserts,.

I would not work on cigarettes, which are not in the customer's or society's best interests. I used to think that advertising impacts only current smokers, but not anymore. When used as directed, they produce illness and death. I don't feel good about appealing to people's worst fears. I am much more paternalistic and moralistic since I've become a parent.

The agency's work for a large defense contractor was justified by one member: "I trust our country's political judgments and uses of weapons.".

Some argued the contrary position, asserting that they could not imagine the agency selling cigarettes. Yet another member argued that "the market" or consumers themselves generally serve as adequate moral safeguards against harmful or bad products. "Our goal is to sell products that ought to be sold. Products that have no merit won't be sold for long anyway." Most in the agency seem to perceive that customers' choices (the market) or government policy (political judgments and laws) function as the primary moral arbiters of the goodness or badness of the products they advertise. These larger external social forces generally were perceived to make internal, agency-wide moral judgments unnecessary, although individuals within the agency were provided the moral free space to dissent without reprobation and to excuse themselves from participation in an account to which they had personal moral objections. In other words, the predominant, but implicit, moral philosophy in Agency A perceives primary (but not exclusive) moral agency to lie outside the agency. This reliance upon external moral sources is perceived to free the agency from the necessity of making on-going moral judgments about social well-being within the practice of advertising. In this sense, morality acts not as a "thicker" vision of the social good that would guide organizational culture and decision-making about advertising products, but as a set of negative constraints, created by society and imposed externally, which define a "thinner" notion of moral permissibility. The agency is called upon to advance client interests as effectively as their creative and technological capabilities permit within broad constraints of moral permissibility.

Others acknowledged various ways that moral considerations might conflict with the duty to create effective ads. Without providing answers to her queries, one member reflected, "We have a responsibility to understand the impact of our products and ads and whether we leave a positive or negative impact on society. Are we creating culture or merely reacting to it? Are there products that aren't needed or that are bad for you?" She went on to acknowledge that her professional role and its benefit to society are harder to measure than a physician's, for example: "What I do does not have a direct benefit on consumers like a doctor does a patient." Rather, its social benefit and moral justification are its general contribution to the well-functioning of our economic system: "I am a part of the cog that creates jobs, opportunity, and the country's wealth. We create needs and desires that people sometimes can't afford; nevertheless, it is a positive part of the capitalist system." Another member defended this economic contribution less ambiguously and in a more morally forceful way: "We allow entrepreneurs to introduce new products. This takes power away from the retailer and gives it to the consumer." In other words, advertising can be a form of empowerment for the creative contributions of entrepreneurs and thus a means to redistribute power in society, away from traditional centers (mature products and producers) to new sources (new products and producers) that may generate new benefits for users and society. Another, though, could not escape from this ambivalence of purpose: "How important is advertising really to society? We rationalize it by saying we serve an economic function, our sales provide jobs, etc. But our value to society is constantly questioned." Another noted, "We sometimes try to add value where there's really no value to be added." These women were joined by another agnostic, who commented, "My first opinion was that advertising was one of the most unethical industries--selling what I don't believe in. I'm not sure we're any worse than any other industries, though. I thought it attracted people lacking in ethics. I still see questionable people, though--divorces, affairs, sexual harassment, arbitrary terminations.".

Corporate culture: teamwork and creativity in service to the client. All organizations acquire traits, values, and patterns of behavior that collectively shape the individual behaviors of their members and the work in which they are engaged. Members at Agency A identified the following key values and organizational traits: client satisfaction, teamwork, creativity, honesty and truth telling, good judgment, and avoiding conflicts of interest.

Client Satisfaction. Client satisfaction is a strongly articulated value among agency members. More than any other, this value functions as the unifying purpose that members identify within their agency. (The reader should refer to the discussion of agency purpose.).

Teamwork. Teamwork involves the capacity of individuals to function effectively in groups to produce ads that satisfy the client. Due to the subjective nature of advertising, teamwork is perceived as an indispensable value, for its absence could result in strong individual egos dominating and corrupting group effectiveness and productivity, ultimately compromising the agency's service to its clients. The strong emphasis on teamwork supports the agency's commitment to produce "effective" ads that satisfy the client rather than more "creative" ads that win more industry creative awards but might not sell the product so effectively. This agency commitment affects the internal balance of power between creatives and other personnel, primarily account executives: "We're less likely to have creative stars here with big egos that run the place." Individuals speak proudly and appreciatively about the strong bonds of collegiality, excitement, and mutual support that exist among cross-functional work groups serving their clients. This value serves as a strong incentive for personal excellence and employee satisfaction. One professional with years of experience in several agencies stated, "This is the most apolitical agency I've ever worked for. We don't foster individual kingdoms and power struggles. People give away ideas to each other and put the agency's good above their own personal good.".

Creativity. While creativity is not the dominant value that "trumps" other organizational values, as is the case at other agencies, it is nevertheless vital to the success of the agency: "We produce break-through advertising that makes our clients' businesses successful. We channel creativity in the service of effectiveness." Recall Melanie Summers' eloquent portrayal of the expression of creativity as one of advertising's important contributions to society and to its own creative professionals. Said a senior media director whose decades-long career has been spent in the industry, "Advertising is the poetry; marketing is the information.".

Honesty and Truth Telling. Honesty is generally affirmed as a value embodied in the ways that products are advertised to the public and in relationships with clients. For instance, many articulated a strong duty to communicate research findings to clients with unswerving honesty. On the other hand, members expressed various perceptions of and moral reactions to the agency's practices in billing and expensing client accounts. One member indicated that clients are not overbilled at Agency A but acknowledged that overbilling occurs at other agencies. Another suggested that overbilling occurs in the form of "absorbing costs," e.g., when a charge is falsely expensed to another account of the same client in order to keep an account under budget. The same person shared a frequently expressed view of those interviewed, "Economizing is not a strong value here." She went on to claim, "I've never been pressured here to do something unethical," in contrast to a former agency. There, she had been required to create false invoices for a client's account, which she considered an unconscionable request; she complied, but she left the agency shortly thereafter. This response suggests a moral distinction between blatant falsification of totally fictitious expenses, which is considered an egregious moral fault, and "cost absorption" that merely shifts actual expenses from client to client or among accounts of the same client, which some seem to consider morally permissible within certain limits. Some claimed that expense reports are padded occasionally, for instance by rationalizing that the expenses are generally only "nickel and dime" items or that one comes to feel he/she is "owed" such minor perks for long and hard work for a particular client that is sometimes not appropriately accounted for in the billings to the client or in the member's compensation package.

The roles of honesty and truth telling also surface in the tension between taking creative license and providing harmful or misleading advertising. Some acknowledged the potential for "puffery," subtleties and ambiguities of information and truth claims, and "shades of gray" that are often present in the ways a product is advertised: "We the industry sometimes create perceptions in the minds of consumers that should mean something but really don't." One person cited a recent highly effective Kodak ad by a competitor that portrays photography as the "selling of memories" but retorted that "all film sells memories; it's just that one company took advantage of that concept." Yet the overwhelming consensus is that honesty and truthfulness are important moral values that should not be compromised with customer or client: "We must support the claims we make about our products . We cannot lie or mislead." "We must exhibit realism in our ads, especially with children. We cannot overpromise." One person proposed that creative license with a product is permissible as long as it is not harmful or misleading: "We must be utterly honest when we communicate consumer preferences from our research to our clients." Another individual claimed that the industry engages in "mega-puffery" but believes that "the consumer will recognize it as puffery." Advertising itself is "a world of fabrication." In other words, there seem to be different types of "puffery" and creative license that could be harmful and should be avoided, and some that are perceived to be less harmful or even harmless and a part of the nature of their industry, function, and craft. Indeed, some expressed comfort in acknowledging the role of external regulations, such as the networks and federal government, which aim to safeguard the public by preventing certain types of intended or unintended deception, e.g., the National Label Education Act, which requires full disclosure of nutritional content for food products. Another individual even appealed to Christian values that prohibit her from lying or taking advantage of people: "I won't do that fabricate based on my personal morality and ethics. Furthermore, telling the truth is the best way to position the product in the marketplace.".

While there seemed to be consensus that dishonesty and even blatant puffery are inappropriate in advertising, the moral reasons for this prohibition generally were limited to appeals to personal values, religion, or economic self-interest. Only one person made any references to industry or professional standards or norms (e.g., network regulations, professional association codes of ethics) or to any legal constraints, noting the National Label Educational Act.

Good Judgment. Good judgment is colored by the general perception that advertising is an inherently "fuzzy," subjective enterprise. While agency members express strong pride and commitment to doing "good work" for their clients, they acknowledge the inevitable diversity of judgments about what constitutes good work and a good ad. They acknowledge the reality that advertising is more art than science, even though the field has become more scientific. For instance, the science of market research has become more sophisticated in its empirical ability to understand and identify consumer preferences. New technologies such as retail information scanning at the point of sale give the producer more precise and sometimes instant feedback about consumer preferences, permitting ever more efficient response to consumer needs. Agency A, like most other large agencies, devotes considerable expense and personnel to utilizing various techniques (e.g., focus group discussions with samples of prospective customers) that try to take the guesswork out of predicting whether their ads will be effective in the marketplace. Nevertheless, all acknowledge the large scope of subjectivity that lies at the heart of their enterprise. This subjectivity can be the source of lively and creative--indeed, sometimes heated and adversarial--debate among account teams as they create ads for their clients.

Some expressed the view that this subjectivity implies the importance of "making good judgments": "We work in an essentially subjective business, which raises issues about the objective measures we use for judgment, which are themselves subjective. This was more difficult in the past when we were highly politicized and our culture was dominated by cults of personality. Decisions seemed arbitrary." Another stated, "Since there is no 'right or 'wrong, you must trust your judgment." In other words, judgment becomes a valuable professional skill based upon experience and expertise, but one that is acknowledged to be highly subjective and intuitive, not based on readily demonstrable, objective criteria and standards, as is the case in some other professions and fields.

Avoiding Conflicts of Interest. A final ethical value is the need to avoid conflicts of interests. This issue was discussed especially among buyers in the media department. One media supervisor stated:.

We get a lot of vendors "doing favors" for us, taking us to sporting events, dinner, etc. These become gray judgment calls because you could compromise your judgment and begin to justify it to a client. This potential to cloud one's judgment is especially pronounced in our business because the factors upon which we base decisions are already so subjective. Such gifts and favors are constantly available as temptations that can compromise the buyer's sense of objectivity and duty to the agency.

AGENCY B: A MID-SIZED, FAMILY-OWNED FIRMByron Newcombe is the 51-year-old president of Agency B. Approximately 15 years ago, he purchased the agency from his father, who then retired after running the agency for more than 40 years. An active Roman Catholic layman, Newcombe seeks to create advertising that is consistent with his own humane, moral vision of the world. This goal involves an intentional, but sometimes subtle, effort to inform the moral content and tone of the advertising the agency creates. For instance, the agency tends to eschew ads that promote violence or aggression, sexist portrayals of women or men, harmful products such as tobacco or alcohol, or marginally or questionably beneficial products. Instead, the president seeks to advertise in ways that tie the product to positive social values such as personal growth, respect for persons, good health, solidarity among people and family units, nonviolence, and community well-being. Byron is a youthful, charismatic individual who is also widely read intellectually in philosophy, religion, and American history and culture. He has an MBA in marketing from a prestigious business school. Under his leadership the agency has grown from $3 million in annual billings to approximately $30 million.

Jane Jacobsen is a highly successful 38-year-old account executive who has been with the agency for two years, after working at other larger agencies for several years. According to Jane the purpose of advertising is to help clients sell their products by communicating effectively with their publics. She feels uncomfortable with the president's conviction that the agency should seek ways to substantively shape the moral character or tone of the messages they communicate or to influence the values of their clients. Rather, she subscribes to the belief that an agency's duty is to create advertising that sells a client's products. In this sense, the agency's role should be reactive, responding to both clients' wishes and market preferences. Jane is a hard-working, bright, articulate, well-organized, highly competent professional who knows the business well and who takes pride in doing her work of coordinating the development of advertising that meets the needs of her clients.

Purpose of advertising: servicing the client and creating the good society. Agency B's culture is shaped by an internal debate about the purpose and mission of its advertising. This privately held agency is run by a descendant of its founder, who self-consciously seeks to shape a culture with a distinctive mission and values. The president is a socially progressive and religiously serious individual who seeks to imbue his agency with values consistent with his own religious commitments. Indeed, this agency's values are widely perceived among its members to emanate from its president. By contrast, members at Agency A never attributed their organization's strongly articulated values to any individual in the agency, either present or past. Agency B has a succinct statement of corporate mission and values; its president and some of its members claim that this statement drives the organization and shapes its advertising and business activities. This statement appeals to such values as exceeding client expectations, employee growth and development, benefiting the end-user, and contributing to the well-being of society.

Hence, where Agency A's mission of service to the client tended not to include much space for discriminating moral judgment about the moral nature or social value of the product itself, Agency B's morally laden mission statement as well as the strong persona and influence of its president not only permit but seem to require such moral judgment.

This "morally thick" values-driven vision of advertising's purpose and agency mission has a variety of effects on the corporate culture of the agency. It variously creates debate, inspires, stimulates and motivates, and causes skepticism and even occasional reactions of hypocrisy among members.

First, some are inspired by and feel they have reasonable levels of understanding of and commitment to the agency's and president's commitment to a strongly values-based vision of advertising. (Indeed, this factor attracted them to work there.) For instance, the agency has declined opportunities to advertise food products with little or no nutritional value because they do not promote physical health. They persuaded one client to alter the way it advertised a military toy, portraying its humanitarian capacities to rescue lives of comrades rather than its destructive qualities. The president did not want to portray a product in a way that contributed to what he believed were already excessively high levels of violence in the media and popular culture.

All in the agency believe that the agency would never consent to advertise harmful products such as tobacco or alcoholic beverages. Some believe the mission can provide a unique market niche that links the agency to likeminded clients who share a commitment to creating a society that embodies humane values. For instance, members cite a recent business pitch they made to a large sporting goods manufacturer in which they portrayed the primary value or benefit for the consumer of a product as the joy of physical activity and fitness and as a means for family and friends to celebrate their bonds of relationship. This approach contrasts with conventional emphases on hard and painful conditioning, competitiveness and individual achievement, and winning at the expense of others, or the use of sexist portrayals of men and women. Unfortunately, the pitch was unsuccessful because the prospective client hesitated to work with such a small agency. One media director defined the difference in their approach to their products:.

Our president's point of view gives a different spin on how we look at marketing and companies. We try to get outside classic formulas and boxes and bring in the human elements. We ask, "How does a product impact people?" We're starting to get at the core of what's really important with our products and get at the heart and emotion of the product, seeking a "higher element.".

A second cluster of members is unconvinced that such moral agency is even possible in today's marketplace, given typical agency-client dynamics. One account executive stated, "I'm not sure we have any ability to influence our advertising. Rather, we are strongly reactive to our clients. They drive the product, not us. In fact, in our effort to satisfy our client, we give in too much. We cave in and don't stand up enough to them." When asked if there was anything distinctive about their product, he responded, "I don't think so. The process is the same; the variables that shape the product are the same." Another account executive states, "I haven't seen our values have any practical applications to my clients. None of the work we've done has anything to do with that.".

A third cluster of members exhibits moral discomfort with, if even principled objection to, the claim that the agency should actively attempt to shape the moral character or message of a client's products. Jane Jacobsen declares, "It's not my job to force my clients to subscribe to a set of values ; it's my job to help clients sell their products. Our role is reactive. I have not seen opportunities to lead clients to socially responsible opportunities." She goes on to suggest the moral appropriateness of avoiding harm ("I would not do things inherently harmful, like advertise things like tobacco or hand guns") but the moral inappropriateness of attempting to define the human good with her clients. She regards that as a paternalistic infringement of freedom: "Advertising should create positive moral values? Whose values are they? I don't share some of our president's moral values." Rather, she believes the market should be the moral arbiter of values: "I should offer the benefit that the customer wants even if it's not what I want. My beliefs should not override what the market wants. I am not willing to make judgments for people.".

In effect, persons representing the latter two positions generally believe that the purpose of advertising cannot be or should not be morally laden in its basic character. It is not an exercise of practical reason that aims at the moral good. Rather, advertising is basically amoral. It is a matter of technique, albeit good technique. Its value is judged by how well the client and/or the customer/market is satisfied, and thus according to criteria that are independent of the moral agency of the ad agency itself.

This internal debate about how far Agency B should go in shaping the moral content of its advertising was adversely colored by two recent developments. First is the fact that the agency has been in a period of economic stagnation for the past few years, during which they have not secured any new clients. This problem has resulted in downsizing, notably two painful workforce reductions two years ago, the first in the agency's history. Morale is low; members fear for their jobs and criticize the agency's unsuccessful efforts to secure new business. Many conclude that their values-driven philosophy is ineffective and that their president's optimistic belief that they can carve out a special niche in the marketplace is misplaced: "These values haven't brought us any new business. It shouldn't be this hard." Many see no tangible positive results for the agency, like growth in clients and revenues, and thus are quick to discard the values as insignificant if not problematic for the agency: "We need new business right now, not values." Many see the agency's values as inconsequential, as luxuries that are not affordable for the time being, if not harmful to their efforts to acquire new clients. Perhaps they are trying to be something that nobody wants.

A second development was a recent experience with a very difficult major client, with whom the agency had an unpleasant and trying relationship from the start. Trust levels were chronically low. The client was extraordinarily hard to please. Account executives came to dread their contacts with client representatives. Creatives came to expect their work would always be rejected; they were always going back to the drawing board to generate entirely new concepts. There was constant bickering about billings and payments. The relationship was fraught with power struggles in which the agency tried to be accommodating. Late in the relationship, the client asked the agency virtually to copy the successful ad of a competitor, which it did, with the knowledge and at least tacit approval of the agency's senior management. This ethical lapse surprised most in the agency, particularly those who already doubted the efficacy of the agency's "high-minded moral stance." When the competitor discovered the similarity, the client was forced to withdraw the ad. Indeed, this client and this event are the most talked-about internal story that defines the culture of the organization. In the minds of some, the event seriously compromised the integrity of the agency's philosophy and substantially deflated the seriousness with which many members, especially the avowed "atheists" and border-line "agnostics," were willing to entertain the practical viability of the agency's espoused philosophy and the president's role as charismatic moral leader. Later, when the agency decided to resign this account (an action very unusual in the industry), nearly everyone supported the decision as long overdue, in spite of the substantial loss of revenues for an agency that was already struggling to retain its personnel. The overall consensus was "Our values and self-respect told us to do this. Why didn't we do it long ago?".

Corporate culture: a caring community fighting for survival. Members at Agency B characterize the corporate culture of the agency in terms of the following operative values: respect for the individual, openness and low levels of organizational structure, service to the client, and honesty.

Respect for the Individual. While there are open debate and difference of opinion as to whether the agency's product differs at all from what competitors produce, there is nearly unanimous agreement that Agency B is qualitatively different from any other agency any have worked for: "This place has a heart." "I am respected and cared for as an individual." This atmosphere emanates from the top. The president and other senior managers are known for their "personal touch" with members. Many describe the place as "family" and speak appreciatively of long conversations they occasionally have with the president, who cares about their lives and ideas. Individuals generally leave his office stimulated and impressed with the president's personal concern, charisma, and probing and intellectually provocative mind. He challenges them to consider issues from radically different perspectives. Indeed, until recently the agency had never experienced a layoff other than the occasional termination of an unproductive member. Longevity in the agency was considerably longer than the norm in the industry: "People are not disposable here like they are in other agencies.".

While this commitment to respect and value the individual is generally appreciated, it is also the cause for internal debate and strife. Privately, some in the agency wonder if some longer-term members are productive and talented enough to justify their employment and/or level of compensation. Some believe that loyalty is more highly valued than talent and wonder whether the agency can afford this choice during a period of extreme financial difficulty. Some note that this value made the process of effecting the workforce reduction extremely slow and painful and perhaps inordinately delayed, to the detriment of agency morale and productivity.

Openness and Low Levels of Organizational Structure. Agency B is a highly fluid organization, marked by low levels of bureaucracy and hierarchy. Members work in cross-functional teams servicing client accounts, but these teams are not highly rigid in structure. Many members may be involved in an account. Individual initiative is generally welcomed. The president's door is always open, and people know him to be highly approachable. He seeks input, suggestions, and criticism from all in the agency without recrimination, to the point that some wonder whether there is enough respect and deference for this position.

At the same time, this low level of structure results in very little attention given to formal procedures like goal-setting, strategic planning, the creation of job descriptions, and performance reviews. As a consequence, some complain that the agency is not serious enough in its efforts to measure and monitor performance, which is especially worrisome at a time of financial vulnerability and fear of job loss. Some suspect that a stronger system of regular performance appraisal might have eliminated the shocking necessity of the layoffs two years earlier.

Service to the Client. Members generally believe that the agency distinguishes itself in its capacity to serve the client by developing strong relationships with client representatives. A media director says.

Our clients are usually here and not at a large agency for a reason. I think we develop our relationships with our clients differently. We have strong involvement and closeness. This ability to develop relationships gives our agency personality. Some clients want "hand-holding" and desire high levels of service. Our relationship with clients becomes more real more quickly.

Like Agency A, Agency B does not have a culture that is driven by its creative department. Indeed, creatives often lament the fact that their best ideas and work are rarely accepted by their clients, who tend to be conservative. They complain that agency account executives and clients drive the direction of the creative work, stifling their creative energies, and that the account executives too quickly "cave in" to clients' desires.

In Agency B, commitment to serve the client also entails the tendency to "underbill" clients: "We'll eat costs we don't think a client should pay for, almost to a fault." "I don't know why we have some of our clients. We haven't made a penny from them." This frugality is contrasted with the expensing and billing practices at Agency A.

Honesty. Apart from the earlier example of the pirated ad, members assert that honesty pervades the work of the agency. For instance, they claim that the agency will never overbill a client. One member even cited an incident in which the president returned an overpayment of several thousand dollars to a previous client when it was discovered two years after the fact. He goes on to marvel at this event, claiming it would never occur in a typical agency. Furthermore, some believe the agency does not charge enough for some of its services, noting that some client accounts perennially fail to generate a profit for the agency. They suspect that this pattern stems from the president's desire to maintain long-term relationships and high levels of client satisfaction, in the hopes that these accounts might grow and become profitable in the future. Unlike Agency A, members of Agency B never mention incidents of expense account padding.

In light of this consistent record of fiscal honesty and the president's personal vision of strong moral purpose, the incident of the pirated ad seems even more curious and out of place in this agency. Both creatives and account executives expressed surprise and shock that the event could have occurred within this organizational culture. Even those who do not share the president's morally "thick" vision of the role of advertising in creating the good society regarded the event as a faux pas and a clear error in judgment. For creatives, this constitutes a violation of the values internal to the practice of the profession insofar as stealing someone else's creativity and attributing it to oneself denies the expression of creativity--it is artistic plagiarism. Even account executives acknowledged that pirating ads is something that "just isn't done in our industry," even though it was demanded by the client. In the end, this moral lapse seemed to be a function of a very difficult and trying client relationship, which was also harming the agency financially. Many perceived it as an act of desperation for a client who could not be satisfied by any other course of action.

CONCLUSIONSCorporate culture shapes the ethical understandings and practices of these agencies. A key ethical question is the fundamental purpose of advertising itself. How this purpose is defined, in turn, shapes the grounds of moral authority of the advertising professional. Agency A's corporate culture espouses a more "conventional" philosophy, which views the agency's relationship with is clients as fiduciary. As such, its role is to advance the clients' interests by creating advertising that sells their products as effectively as possible, thus maintaining long-term client relationships. The relationship is "morally neutral" in that it makes minimal judgments about the "moral goodness" of the products, assuming that such judgments about social benefit and harm are made primarily through external mechanisms (consumers, government). In effect, the moral authority of the advertising professional is attributed to, and to some extent surrendered to, external sources.

Agency B's corporate culture is strongly shaped by its CEO, who attempts to translate his personal moral convictions into the agency's philosophy of advertising. That vision is more morally laden. Agency B attempts not only to serve the client well but also to do so in ways that advance a particular vision of the good society. This latter philosophy is more prone to make moral judgments about the goodness or badness of products and also about the values that are communicated in the advertising of the product.

Predictably, the moral ambiguity that surrounds advertising's social purpose also results in some expressions of ambiguity about individual professional identity. Some members of both agencies expressed ambivalence and uncertainty about their own contribution to society, questioning advertising's varied impacts, value, and benefit to society. Others, however, spoke with great professional pride of its contribution to the economy by facilitating the buying and selling and goods as well as its capacity to promote artistic creativity in the service of client. Almost all attested to their own personal growth and development within their agencies.

Members of both agencies are able to identify clear operative values at work within their organizations. What are the sources of these values? The most visible source seems to be the organizations' unique corporate cultures. Notably absent in either agency was any appeal to independent moral standards or professional codes that one would find in a professional ethic (e.g., law, medicine, or accounting) and that stand beyond the norms of one's particular work organization or any mention of memberships in professional advertising organizations. Nevertheless, these advertisers exhibited strong pride in their work. They generally viewed their work as a highly skilled craft, merging science and art in the service of their clients. Notable in both agencies was a strong commitment to pro bono work done for various nonprofit organizations, typically ones that were identified and publicly featured by the agencies for special sponsorship and assistance. Some also cited "personal values" as sources of morality, with religion included as a "personal value," i.e., a value external to the agency that an individual member "brings to work." Typically, personal values, including religion, acted as moral "trump cards." As such, they provide a type of immunity for the individual, which permits him or her to be excused from a practice that may be standard within the agency. For instance, individuals could be formally excused from working on an account whose product they found morally questionable or problematic. Some might decide not to pad expense accounts, although others might do so occasionally. Byron Newcombe is the one dramatic exception to this more individualized notion of morality with his understanding of morality as the shaper of corporate and social vision.

The interviews from these two agencies suggest that questions of honesty and truth telling create fundamental moral challenges for the practice of advertising. Indeed, these moral challenges seem embedded in the very nature of the practice of advertising and its role in a consumer society. This challenge stems in large part from the extent to which advertising engages in puffery, which embellishes, fabricates, and fantasizes in its effort to persuade the customer to purchase a product on the one hand, and the moral boundaries that society wishes to place around that enterprise on the other hand. These boundaries try to define permissible limits to the intent and honesty of advertising's claims and attempt to prevent some social harms. This issue itself begs the larger question of advertising's moral purpose in society. To what extent is advertising merely creative license to portray the product in ways that will most effectively persuade the buyer? To what extent does society have other expectations of advertising's role, such as provider of factual information or as vehicle to create a more substantive vision of the good society? In other words, the fact that puffery seems inherent to the practice of advertising itself relativizes or limits advertisers' and society's expectations of truthfulness or honesty of the product claims. At the same time, this relativizing is limited, for it does not permit advertisers to make claims that cannot be substantiated, contradict empirically substantiated evidence, or mislead in ways that may cause harm to the user. Creative license is not unconditional, but is itself constrained by moral considerations that aim to protect the public welfare. How and to what extent this creative license should be limited, however, is subject to considerable reflection and disagreement, both within the industry and in society. Indeed, this ongoing question will frame much of the moral debate about the character, contribution, and value of the profession to the larger society.

While most professionals in these two agencies acknowledge that advertising engages in puffery, they also strongly affirm honesty and truth telling as important values internal to the practice of advertising. For instance, one is duty-bound never to misrepresent information (e.g., marketing research) to the client, nor should one fabricate fictitious expenses. Showing favoritism with vendors is also rejected as an inappropriate course of action. Plagiarism of competitor's ads is also considered inappropriate but occurred surprisingly under conditions of business duress. Padding and even shifting of expenses among accounts seem more common practices. Hence, honesty and truth telling are not unconditional values; exceptions are made. In sum, how professionals and agencies define the expectations and limits around the embodiment of these values within their own practices often seems unclear and open to internal probing and debate. Clarifying moral expectations around honesty and truth telling will be an important task for the profession and the industry. Ad agencies would do well to make such moral concerns explicit topics for reflection and debate as they shape the fabric of their cultures and clarify what they see as their fundamental purpose to society.

Added material.

David Krueger is the Charles Spahr Professor of Managerial and Corporate Ethics at Baldwin-Wallace College.

Adapted from the Poynter Center March 1998 study entitled "Religion, Morality, and the Professions in America." Used by permission.

 
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